Tax Credit Debt under bankruptcy, they are chasing me for the money again

Tryingsohardtofloat

Morning all,

I'm discharged now but during my BR there was a question regarding an overpayment of tax credits. I had some fab advice (as ever) from Fermi & others. I had to argue it with the OR but eventually I got an apology & a confirmation that a tax credit debt falls under the BR & does not have to be repaid.

I have just had another letter from the Tax Credits dept chasing payment & when I phoned them to explain the man told me that I was wrong, I was liable for the amount & really would not believe me.

I've referred him to my OR, but have the rules changed since I was discharged earlier this year? Or will the OR confirm that the debt was included in my BR.

National_Debtline

Hello there,

Our understanding is as follows:

When someone is discharged from bankruptcy, where the end date of the overpayment is before the date of the bankruptcy, the debt would be included within the bankruptcy. As such it would be written-off.

So, as long as the overpayment was before the date you became bankrupt they cannot chase you.

This is taken from the 'Nortel' case. If you wish to read it, here it is: http://www.bailii.org/uk/cases/UKSC/2013/52.html

Best wishes,

David @ National Debtline.

fermi

Legal position has not changed as far as I'm told. They are still written off by the bankruptcy as long as the overpayment occurred before it.

NINANinja

Really timely thread for me!
I went BR in December 2013 and have just been notified by HMRC that they overpaid me Tax Credits for the period 6/4/13 to 2/10/13
As such, I just notify the OR and the overpayment is included in my BR?
Xx

National_Debtline

NINANinja wrote: »

Really timely thread for me!
I went BR in December 2013 and have just been notified by HMRC that they overpaid me Tax Credits for the period 6/4/13 to 2/10/13
As such, I just notify the OR and the overpayment is included in my BR?
Xx

Yes, absolutely.

- David.

ChumpusRex

NINANinja wrote: »

Really timely thread for me!
I went BR in December 2013 and have just been notified by HMRC that they overpaid me Tax Credits for the period 6/4/13 to 2/10/13
As such, I just notify the OR and the overpayment is included in my BR?
Xx

What date did your bankruptcy start?
What date did HMRC first send a demand for repayment?

If the demand for repayment was sent before your bankruptcy, the overpayments are included in the bankruptcy, and your OR will deal with them.

if the demand for repayment was sent after your bankruptcy started, the overpayments are not included in the bankruptcy, and recovery of the overpayments will continue start after you are discharged.

It doesn't matter when the overpayments were actually made.

The tax credit overpayment and bankruptcy manual can be found at the link:
http://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch73-84/Chapter77/part7/Part7.htm

fermi

ChumpusRex wrote: »

if the demand for repayment was sent after your bankruptcy started, the overpayments are not included in the bankruptcy, and recovery of the overpayments will continue start after you are discharged.

It doesn't matter when the overpayments were actually made.

Not true now under the Nortel ruling in the Supreme Court.

In such that they are contingent liabilities, so that date of the decision to recover or demand for repayment is irrelevant.

NINANinja

Thanks everyone, I'm assuming it's a debt under bankruptcy, under Nortel. I'll inform the OR & confirm on here.

SomebodyToldMe

Hello all

Yes I'm having the same problem...I am currently BR, and my tax credit overpayment was included in my BR- but they keep reducing my award because of the debt!
Already struggling, I am getting less money each month than I am supposed to, but when I contacted OR again about this, I was told there is not much they can do except send the paperwork again!!
Is there anyone else I can report the HMRC to?

NINANinja

SomebodyToldMe wrote: »

Hello all

Yes I'm having the same problem...I am currently BR, and my tax credit overpayment was included in my BR- but they keep reducing my award because of the debt!
Already struggling, I am getting less money each month than I am supposed to, but when I contacted OR again about this, I was told there is not much they can do except send the paperwork again!!
Is there anyone else I can report the HMRC to?

I'm anticipating having the self same problem. HMRC have reduced my current award by £5 per month, which I assume is for repayment of the overpayment. If they'd actually answer the phone I'd know for certain. The OR hasn't got back to me yet, but if HMRC still insist on deducting money for an overpayment that doesn't exist, I'll be taking them through their complaints procedure (probably detailed on their website) and if I get no joy I'll contact my MP. I've had issues with government departments before and you have to keep on at them. You can also go to your local CAB and they can state your case for you too. Get the name (they usually only give their first name), team/department/extension number and location of everyone you speak to at HMRC so that their lack of competence cannot be hidden in anonymity.
Also, perhaps your OR can send you a copy of the "paperwork" they've issued to HMRC so that you can wave it at the appropriate managers and your MP if necessary? My MP's office helped me a lot - they're worth an email to see what can be done.
Hope you get your money back soon.
xx
NinaN

SomebodyToldMe

NINANinja wrote: »

I'm anticipating having the self same problem. HMRC have reduced my current award by £5 per month, which I assume is for repayment of the overpayment. If they'd actually answer the phone I'd know for certain. The OR hasn't got back to me yet, but if HMRC still insist on deducting money for an overpayment that doesn't exist, I'll be taking them through their complaints procedure (probably detailed on their website) and if I get no joy I'll contact my MP. I've had issues with government departments before and you have to keep on at them. You can also go to your local CAB and they can state your case for you too. Get the name (they usually only give their first name), team/department/extension number and location of everyone you speak to at HMRC so that their lack of competence cannot be hidden in anonymity.
Also, perhaps your OR can send you a copy of the "paperwork" they've issued to HMRC so that you can wave it at the appropriate managers and your MP if necessary? My MP's office helped me a lot - they're worth an email to see what can be done.
Hope you get your money back soon.
xx
NinaN

Many thanks NinaN for some good ideas. I am surprised at how useless the OR has been- thought they were all powerful & had creditors shaking in their boots!
Their response has been to keep 'resending paperwork' as all debt is in my petition- this is after my council, chasing council tax arrears- told me this wasn't included in petition!
Experience has shown that writing to the HMRC- registered post- is the only way to get a response (and keep a record) from them or they keep you hanging on the phone until you lose the will to live!
STM xx